For College Students, So Many Health Plans to Choose From

The Affordable Care Act may give college students like Marche Curry, left, an alternative to college health insurance plans.Credit
Joe Raedle/Getty Images

If you’re headed to college this fall, you’ve no doubt planned to pack your laptop, your bedding and your favorite music. But have you figured out your health insurance?

The Affordable Care Act is offering more health coverage choices to young adults, including college and graduate students, said Jen Mishory, deputy director of Young Invincibles, a nonprofit group focused on economic issues affecting young Americans. “There’s going to be options out there to compare and contrast and figure out,” she said.

For starters, if you’re under 26 and your parents have health insurance that offers coverage for family members, the law allows you to stay on their plan in many cases. The government says more than three million people have already gained coverage as a result of this provision, which took effect in 2010. It applies even if you are financially independent, and whether you are single or married. Costs are going up, though, as some plans now charge an additional premium for family members added to the plan.

College students have to consider other twists, too. Suppose your parents’ plan requires that you use a local network of doctors, but you’re attending school out of state. Martin Rosen, co-founder of Health Advocate Inc., which helps workers navigate their health benefits, said you should review your parents’ plan before relying on it for coverage during college. If it is a health maintenance organization or preferred-provider plan and you seek care out of network, he said, “you’re going to have less coverage, or you’ll pay more money for it.”

In that case, you may want to consider a health plan offered by your college. While student plans have until January to provide the full menu of “essential” health benefits mandated by the Affordable Care Act, many colleges are already offering plans that meet the requirements, said Jennifer Haubenreiser, the immediate past president of the American College Health Association.

It’s important, however, to check specifics. Self-insured college plans — those in which the school pays claims directly, instead of hiring an insurance company to do so — don’t have to meet the law’s essential-benefits requirement, said Sara Collins, a health insurance expert at the Commonwealth Fund.

But again, some colleges are meeting them anyway. Northeastern University in Boston, for instance, says that even though it is self-insured, its health plan will include benefits that “meet or exceed” the law’s requirements.

(There had been concern that students eligible for student health plans at self-insured schools — which are in the minority — wouldn’t qualify for financial help on the new state-based health exchanges, which open for business Oct. 1 for coverage starting in January. But the federal government cleared up that confusion in recent regulations. As long as students at self-insured colleges don’t enroll in the school’s health plan, they may still qualify for subsidized coverage on an exchange, according to Kaiser Health News.)

While benefits in student plans are expanding because of the law, premiums are increasing, too, said Stephen Beckley, a college insurance consultant in Fort Collins, Colo. The average annual premium for a student plan at a private four-year college is now about $2,200.

So for comparison, you may want to look at policies available on the new exchanges in October, to see if you can find a cheaper plan. States are starting to approve insurance plans for their exchanges, and some premium estimates are lower than had been expected, but final financial information isn’t available yet.

Coverage purchased on the exchange would start in January. If you already have school coverage for the fall, the ability to switch plans in midyear depends on your school. Some colleges offer only annual enrollment, while others allow students to withdraw at the end of a semester if they can acquire comparable insurance, Mr. Beckley said.

Jillian Foster, 29, who will attend New York University as a graduate student this fall, is uninsured and says she will evaluate her health plan options later this summer. She is too old to stay on her parents’ plan, but is looking forward to having some sort of basic coverage again — either through her college, or perhaps through an exchange, if the coverage is less expensive. “My budget is quite tight,” she said.

Many private four-year colleges automatically enroll students in their health plans, but allow students to opt out if they are covered under a comparable plan.

One possible advantage of school plans is that they typically are considered an education cost for financial-aid purposes, so their cost often may be wrapped into a student’s aid package, Ms. Haubenreiser of the college health association said.

If you’re wondering about your options, here are some questions to consider:

1. Can I choose between my parents’ plan and the exchanges?

If you’re financially dependent on your parents, and qualify for coverage under their health plan, you’re generally not eligible for subsidized coverage on the exchanges, Ms. Collins said.

2. How can I get coverage on the exchanges at a minimal premium?

The exchanges will offer “catastrophic” plans for young people, which offer preventive care but carry low premiums, but have higher out-of-pocket costs. There’s a question, however, about whether such plans will meet some colleges’ minimum coverage requirements, Ms. Haubenreiser said.

3. Aside from my parents’ plan and the exchanges, are there other low-cost options?

One possibility may be Medicaid, the federal-state insurance program for low-income people. Traditionally, Medicaid coverage has been limited to children, pregnant women and the disabled. But under the health care law, some states are expanding eligibility to cover low-income adults. “It’s not impossible that some students could qualify for Medicaid,” Mr. Rosen said.

E-mail: ann.carrns@gmail.com

A version of this article appears in print on August 24, 2013, on Page B4 of the New York edition with the headline: For College Students, So Many Health Plans to Choose From. Order Reprints|Today's Paper|Subscribe